How LAWTrust Went From R103 Million To R198 Million In 15 Months Christi and Maeson Maherry took their R103 million business to a turnover of R198 million in just 15 months. How? With a strong vision, the right foundations in place, and the understanding that 'overnight' success is a ten-year journey. This is how they've built LAWTrust, an industry specialist that owns its niche, has created a highly defensible position for itself, and is now poised for global growth.
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- Players: Christi Maherry and Maeson Maherry
- Company: LAWTrust
- Est: 2006
- Turnover: R198 million
- What they do: Digital information security solutions Team: 90 people, 28 of whom are developers and security engineers
- Visit: www.lawtrust.co.za
But here's the thing about a grand vision. First, no goal can be achieved without laying specific foundations and building blocks. When the tender was awarded to LAWTrust by the Department of Home Affairs, they had just six weeks to implement. Christi and Maeson's international product partners said it couldn't be done — that no national project of that scale had ever been completed in six weeks.
"The rollout was scheduled for Nelson Mandela Day, and we couldn't miss our deadline. We had to deliver," says Christi. "If we had won the tender when we launched in 2006 we wouldn't have been able to meet the deadline," adds Maeson.
"But we had spent seven years working on our core competencies, systems, processes and products. It was still a massive project, but we'd built up the internal competencies to pull it off. You have to systematically prepare for growth."
Second, successful companies are built because they get into the market and they start trading. Elon Musk's ultimate goals are to build solar roofs that seamlessly integrate battery storage; to expand his electric vehicle product line to address all major segments; and to develop a self-driving solution that is ten times safer than manually operating vehicles.
To get there, he's built the Tesla: A low-volume, expensive and exclusive car. That product range is funding a medium volume car at a lower price, which in turn will fund an affordable, high volume car — which will fund his ultimate goals.
The point is that you need to be in the market. You need to build solutions that customers will pay for and that bring in revenue, but also allow your business to grow and develop.
For LAWTrust, those solutions were built for the banking sector. When the opportunity to tender for the national ID card project came up, it was the culmination of Christi and Maeson's vision — but under no circumstances could it be achieved at the expense of their existing client base.
And finally, what happens once the grand vision is achieved? Truly innovative companies that achieve market longevity are able to look beyond their own goals to the next ground-breaking vision. You need to simultaneously live in the future and in the here and now.
Here are the top five lessons Christi and Maeson have learnt while building their business.
1. Develop principles you believe in
LAWTrust was launched because Christi and Maeson wanted to focus on cyber-security within the digital space, as well as digital identities and authentications.
They were both working in the crypto space, but wanted to create something of their own, and so they found a partner who would bankroll the business in exchange for a solution that allowed for the authentication and protection of digital contracts in the legal sector. Unfortunately, the solution ultimately needed local laws to change, a factor they hadn't considered and which was taking much longer than expected. But it gave the business a platform from which they could build encryption solutions for other sectors, most notably the banking sector.
In a nutshell, LAWTrust authenticates "safe' websites, and provides user protection once you are in those websites, so that your details cannot be accessed by anyone else. These solutions work for Internet sites as well as Intranet sites, and have been extended to create personal, life-long digital IDs through the new national ID cards.
But the success of these solutions has stemmed from a set of core principles, rather than specific tech solutions.
"You need to develop a set of principles that you believe in, and then find a way to deliver solutions based around those principles," says Christi. "For us, identity is the key to security. How you prove identity may change, but the principle is sound, and that's been imperative to how we develop solutions.
"We've always believed in PKI — public key infrastructure — which is a set of roles, policies and procedures that create, manage, distribute, store and revoke digital certificates and manage public-key encryptions. Ten years ago, Gartner said PKI was dead.
"We disagreed. Not because we were married to one set of tech or solution, but because we held to our core principles, and believed that PKI was the best way to deliver on those principles. We spent a lot of time convincing our clients of this fact, until Gartner ultimately retracted their statement.
"We agree that you can't be married to your solution. The next interesting tech is blockchain. If we ignore this, we may no longer be the niche experts in this field in the future. But we also really believe that the principle comes first — the method of delivering the solution based on that principle is secondary."
For Maeson, this isn't just true of technology companies, but all businesses across sectors and industries. "In the late 1800s and early 1900s the primary mode of transport was wagons. A company whose name and products only focused on wagons was left behind once the automobile was invented. A company whose name and products focused on transport solutions, however, could move with the times.
"It's all about how you view your business and your product. Are you in the business of producing horse harnesses, or are you in the business of helping people get from point A to point B? Your view will determine the company's focus, and how agile you are.
"This has been the cornerstone of how we view our place in the market. We provide digital identities that protect personal and company information. How we do that might change over time, but the principle remains the same."
2. Be courageous in everything you do
Christi is no stranger to courage. In fact, her personal motto is that you should invest everything you have in the journey.
"No guts, no glory," she laughs. "I was the first female in South Africa to complete the VIP protection course for the National Security Agency, and it was because I wouldn't take no for an answer. I got to serve the President. I was on his protection detail.
"I met Barbara Bush in the White House, and was assigned Prince Philip's protection detail when he visited South Africa. You need to know what you want and go for it — and the beauty of it all is that courage is a habit that you can build and repeat."
It might be Christi's personal mantra, but it's the cornerstone of the business she and Maeson have built together as well. "If your executive judgement is sound, then you have a solid business," says Maeson, whose background is in electronic engineering.
"Business is all about accepting certain levels of risk. If you're focused on growth, you spend most of your time in unchartered territory. This often means taking on big tasks and figuring them out along the way."
While Maeson is naturally more cautious than Christi, the partnership works well. Christi's focus is on the future, and she's always ready and willing to blaze ahead, while Maeson requires data to plot their course and growth plans.
Together, they balance out, and with an agreement in place that courage is a necessity, and that risk is inherent in business, they walk the line between focusing on big, hairy, audacious goals (BHAGs) and putting the necessary systems and processes in place that will get them there.
"If we didn't have this mentality we would never have pitched for the national ID card project," says Maeson. "But without Maeson's systems — and his entire team's willingness to work 20-hour days for six weeks straight, we wouldn't have delivered," adds Christi.
Being courageous goes beyond just taking business risks though. It's also about having courageous conversations with your employees and customers.
"Some of the most intimate customer relationships we've built have started with a problem, which we gave 110% to fix. This is the foundation for a fantastic relationship — but not if you aren't honest," says Christi.
"Always be honest; don't say that you have a solution when you don't. Rather tell clients that the issue is tougher than you assumed and you need another week to find the solution. There's a temptation not to communicate with customers while you fix a problem, but we've learnt that there's no such thing as overcommunication. People feel secure when they have all the facts. It's not always easy to be this transparent, but it's essential to successful relationships built on trust."
3. Owning your niche creates defensibility
One of the key areas investors evaluate businesses on is defensibility: How difficult is it for competitors to come into your market and encroach on your market share?
Maeson and Christi have concentrated on three key factors to ensure defensibility in their market. The first is that although they stick to a niche within PKI and crypto solutions, they work across multiple industries and sectors.
"We follow a strategy of never playing in only one sector," says Maeson. "We have a base of solutions that we tweak according to industry-specific needs. This means that we aren't reliant on the success or growth of any one sector."
This strategy was developed on the back of LAWTrust's first big failure, which was developing a product for their first clients and investment partners that could not be implemented because the law lagged behind the solution.
"On spreadsheets, the business model looked great," says Maeson. "What we didn't take into account was that the business plan involved changing the law, and you can't put a timeline on that."
Christi and Maeson didn't let this early failure deter them. "We are security specialists and we knew that our vision was rock solid," says Christi. "The first product didn't work, but it gave us the building blocks for three other products. We were trying to solve the fact that legal contracts have to be sent via registered mail.
"We created an encrypted mail solution, which established building blocks for a number of other solutions. The product didn't work, but it created a great start for the company."
Both Christi and Maeson considered themselves to be PKI visionaries, and so they unbundled the first product, and repackaged it into three different solutions that were not industry-specific.
"We convinced our shareholders to continue this journey with us, and we made the decision to create solutions that worked across sectors and industries going forward," says Christie.
Two years later, in 2008, LAWTrust signed its first banking client. "Specialists can go up against giants," says Maeson.
"We knew we didn't want to be small generalists. This isn't a defensible business model but being very specific niche experts is a different ball game. We can't be commoditised by larger companies, and we aren't really competing with them. Instead, we're the OEM experts that large integrators use when they're delivering on a project."
Maeson and Christi both believe that specialising in an area offers protection. "We have 90 people working for us who are all crypto experts," says Christi. "Someone who is passionate about this field will come and work for us, because it makes up 100% of their job instead of 10% or 20% at a large IT firm. This means we have the best in the field working for us, and we're completely focused, putting us at the top of our game."
LAWTrust's core focus is on customer success, which requires exceptional customer service. "Everyone says customer service is their key differentiator, but for us it's a non-negotiable if you're building a defensible position," says Christi.
"Substantial deals have come from answering the phone at 10pm on a Friday night to help a client out of a jam. We know that if banks or the Department of Home Affairs aren't delivering, it's our fault. Protecting them is our number one priority. I would rather be disturbed at 2am than hear the next morning on 702 about long queues outside Home Affairs."
This focus on customer success shines a light on your sector, which in turn attracts competitors to your space. Christi and Maeson understand that this is the cost of doing business, and that it makes creating a defensible position an ongoing process, rather than a once-off.
"The best defensibility is to know what you're doing and to enjoy doing it," says Christi. "If you're passionate about what you do, you'll naturally put in 120%. You'll shine and attract the best people. This will in turn drive you to deliver exceptional service, which will give you a strong track record. We have incredibly strong references. Any new players to the market will find it difficult to compete with the level of delivery we've achieved."
4. Lay the foundations for growth
It's never too early to start laying the foundations of growth. "When the opportunity for a large contract comes along, and you put yourself and the business out there, you need to have scaled the business already," explains Maeson.
"To even win the deal in the first place you need to prove you can implement and support your idea. We've learnt that "overnight' successes are actually ten years in the making. They take a vision, and a roadmap of how you're going to get there."
This is true of everything LAWTrust has done since its launch, but can be seen in action in the national ID project.
"The ID card tender was ten years in the works," says Christi. "It came up a few times without successful contenders securing the project. Then the last time it came up there was a digital component. We had spent a few years in the market, had developed a reputation for delivery, and we had the product.
"The timing was right for both of us — we had a solution that matched their need, and we were confident we could deliver in the extremely tight timeframe."
Christi and Maeson had a grand vision — but on the ground is where you make grand visions work. "The heavens don't magically open after 18 months in business," says Maeson.
"We knew where we wanted to go, and we had to figure out the best path to get there. We needed to do the time. Our entire business is based on trust, integrity and security. There are no short cuts to this. We needed to develop the right products and build a reputation, and that takes time in the market, and an unwavering focus on delivery."
Maeson has focused on developing two different sets of products: Commodity products that are cash generative, because they offer annuity (subscription) income, and can be housed in the cloud or on client premises. These solutions are developed with international partners; for example, LAWTrust is the Entrust partner in Africa, and has Adobe and Microsoft international accreditations.
Maintaining these requires annual three-month audits from KPMG, and solutions are built onto international products to integrate into existing systems. On the whole, they are subscription based, which frees the team up to develop specialist solutions, like the national ID project.
"These have a much longer sales cycle, and so we need the mix of both commodity and specialist projects to make our business model work," says Maeson.
These solutions can be deployed anywhere in the world, and this has opened an additional revenue stream for LAWTrust in international markets. Moving into international markets also hedges currency risks. "Every company around the world has a digital strategy. We can provide the trust that clients need to feel comfortable sharing their information online for any business, anywhere in the world," says Christi.
Interestingly, sometimes part of the growth journey is to not grow. This happened to LAWTrust after the implementation of the national ID Project.
"The project took six weeks to implement, and during that time we communicated regularly with our banking clients. It was a huge project that required an enormous amount of our team's focus, and we needed to ensure that they didn't feel abandoned by us," says Christi.
LAWTrust's clients understood their constraints, and because the solutions they employ are subscription-based, managed PKI solutions, they continue operating without LAWTrusts's express focus.
This is one of the challenges of growth. You need to have scaled to be able to handle a project of this magnitude, but you can't double your team overnight. You need to deliver with what you have. Many companies fall short when they're trying to scale because they either over-spend in preparation for a large project, or they can't invest in the growth needed to deliver the project.
In LAWTrust's case, Maeson's team worked day and night to deliver, with the understanding that it was short-term only. Thereafter, the business knuckled down and focused on ensuring all the systems, processes and teams were in place to handle the new contracts. It's for this reason that there was almost no revenue growth between 2013 and 2015, but the business then doubled its turnover in 2016, taking it from R103 million to R198 million in 15 months.
"Revenue growth is good — it's the focus of all high-impact, growing businesses," says Maeson. "But it cannot be the be-all and end-all of what you're doing. We needed to consolidate the business and ensure our foundations were ready for the next level of our growth before we embarked on it. Once we had everything running seamlessly we could start focusing on growth again — with a large focus on international markets."
5. Never stop learning
Christi and Maeson have a strong belief that great businesses are built when you attract — and retain — the right people. There's a strong leadership component in talent management however, not just from the perspective of managing your teams, but in having the ability to step back and give your upper management the freedom to make decisions and take ownership of their roles.
"When you give people the opportunity to do their thing, you'll build a better business — provided you have the right people on board," says Maeson.
Interestingly, this ties in with the two founding partners' focus on self-development as well. "We're continuous learners," says Christi.
"You can't step away to focus on your personal growth and business acumen if you're always working in the business, and without that growth you can't adequately work on the business. To do both, you need to trust your team to continue with the day-to-day operations."
Christi and Maeson have both taken numerous executive courses. Christi started with the Management Advancement Programme (MAP) at Wits Business School, which ignited her renewed love of learning.
"I realised the value that ongoing learning adds to my business and myself," she says. This was followed by programmes at EY and even Stanford. Maeson is completing his PhD, and has also completed online courses through Stanford. They also regularly attend international conferences in their sector.
"Our aim is to globalise, and to do that we need a broader view of international markets and challenges, as well as a global network. These courses help us achieve that goal and set up new channels, and give us insights into different cultures and drivers," says Christi.
"They also help you leapfrog your organisation," adds Maeson. "Why make the same mistakes that other businesses make when you can learn from them? Business theories and case studies have been invaluable in our growth and understanding of our business. We've laid the foundations for global growth because we've focused on getting all the right elements in place — and that includes ourselves and our own knowledge base."
Courage is a habit
Get into the habit of holding courageous conversations with staff and customers.
Business is about accepting certain levels of risk
If you're focused on growth, you spend most of your time in unchartered territory. Take big bites and then focus on figuring it out.
This is crucial. Business and technology are changing all the time and you need to change with them. You'll make mistakes — that's okay. Just make them quickly so that you can learn and move forward.
Believe in principles, not a solution
Solutions — and how they're deployed — change. Make sure you have a set of principles at your core; how you package those solutions shouldn't be at the centre of your business.
Focus on operating costs first
We've done this with our annuity income streams, which has enabled us to focus on specialist projects.
To scale, scale people
This is where the real growth happens — with your people and what they can deliver. Be transparent with them, support them, help them to grow and develop. Great teams build incredible businesses.
Have foundations and sub-strategies
For us, the foundation is to remain a niche and specialist provider. However, we have very specific growth plans that require sub-strategies. These are to diversify our product offering, build our people, and balance our currency earnings. We're cost-effective and highly skilled, which is a good combination for international growth.
Build partnerships based on trust
This is essential across the business, from client partnerships, to teams, to the founding partnership. We are very different people with specific skill sets, and we approach ideas from different perspectives. It's important that we trust that our goals are the same, and we're arguing about the best way to get there. Ultimately, we know that each argument is in the best interests of the business, and that's the result of trust.
Building a high-growth organisation takes time
So put in the time. Don't expect instant traction. The best businesses are built on solid reputations and referrals, and those take time to develop.
Always be honest. Be honest with your staff and your customers. Don't take the easy road and be quiet when you're solving a problem. Rather let everyone know where you — and they — stand.